Question

The unearned rent account balance at December 31 is $86,000, representing the receipt of an advance payment on December 1 for four months' rent from tenants. Journalize the adjusting entry to record the rent that was earned during the month of December.

Answer 1

Golden rules of journalizing the transactions:

1. Assets

Debit asset account - To increase the asset balance

Credit asset balance - To decrease the asset balance

2. Liability Credit liability account - To decrease the liability balance

Debit liability account - to decrease the liability balance

3. Expenses and losses

Debit expense account - to increase the expense balance

Credit expense account - To decrease the expense balance

4. Revenues and gains

credit revenue account - To increase the revenue balance

Debit revenue account - To decrease the revenue balance